So how does category management differ from any other business process? Well in most cases it doesn't, that is, if your objective is to drive sales and you include a strategy to achieve that objective, while in the process you include some research with the end result you implement some sort of change in the way you communicate or display your products in store, but hang on isn't this called the category management process?? Yes without knowing it you were already following the cat man process. Job done Cat Man explained!!. So with that out of the way, let's look at the key elements within the category management process that can actually drive sales if done correctly.
Promotions are a great way to capture your shoppers attention as they enter your store, these may also act as an incentive to shoppers who may just be browsing for a gift or a treat for themselves. The Category Management process will help you decide whom you’re trying to target based on a specific set of objectives e.g. you want to target more men so you promote men’s health etc. by having a more structured approach you will avoid a hit & miss approach to sales potential and also reduce the risk of lost sales. The tactic’s stage in the process will highlight what actions need to be taken to achieve your sales objectives.
Understanding your shoppers is vital to your business, but just how much do your really know about their wants and needs? this is why doing some structured or non structured research on your customers will yield valuable insights into what consumers think about your services and product range, you can then analyse your strengths and weaknesses and use this information to ensure your customers keep coming back. Loyal customers buy more and are easier to up-sell to. Both qualitative and quantitative research will give you real insights into what actions need to be taken to ensure you stay relevant to their needs.
Store Layout analysis
A key part of any good strategy is the store layout, a factor often forgotten about in category management projects. Shoppers don’t want to be confused by your store layout, they want to find what they need quickly which gives them more time to browse within the range that you stock. Walk in their shoes think of a random product and how you would navigate the store to find that product, are the categories positioned next to complementary categories? Draw out your layout and ask yourself if it makes logical sense, does it promote cross category selling. A good Cat Man process will look at cross category sales and positioning opportunities, these opportunities can be quantified with the use of a good floor planning software tool. Good category management should take into account how any potential changes may effect other categories within the entire store as there may be further opportunities discovered during the process.
Shopper decision tree & Category Markers
Shoppers respond well to clearly signposted category markers, one of the steps in Cat Man deals with the ‘shopper decision tree’ or how shoppers shop, this will help with category naming and positioning, it may also help you define new categories based on the occasion or usage or highlight categories that are more popular at different times of the year or have become ‘on-trend’ e.g. organic. Be careful with generic signposting e.g. ‘Health foods’ and try a more direct approach e.g. muscle building, weight loss etc. You could also consider breaking up the fixtures with some form of barrier and introduce light and colour wherever possible as this ensures the products stand out on the shelf, attractive displays attract more shoppers.
Market & Competitor analysis
Market data can give you real insights into what the trends are, both the categories you stock and the categories you might stock!. You can also gain insight into your competitors activities and track their performance with market data. There's not much point for example investing in a declining category, it would be wiser to look at/invest in emerging new categories.
Product or SKU analysis
Detailed analysis at sku level may yield key insights, for example there are many new products that hit the market on a regular basis but how are they performing? You can also learn much about how your own products perform in different locations and in different channels given you insights into how to support them at different times and in different ways to ensure your budgets are spent wisely and efficiently.
Think about what your customers buy at the sametime, a key strategy may be to locate these items next to each other or create link deals to promote multi purchases this will help drive your basket size up. For example, people who buy cigarettes also tend to buy gum and mints, and people who buy soft drinks also tend to buy snacks. Without a clear strategy or objective it will be difficult to measure any success as both are closely linked, as they say if you don't measure it how will you know your making a difference?
Category Tactics Communication
A great way to communicate with your shoppers is to 'enhance' your fixturesor create a bit of theater, for example, during key seasons like Halloween or a major sporting event why not dress up your fixtures with some themed POS and grouping relevant product categories together that will encourage your shoppers to buy from categories they might not have come in for in the first place. This is one area good Shopper Marketing really excels and its worth spending the time and effort to get it right.
When deciding what to stock there’s no need to stock every product under the sun in a range as this will lead to confusion for the shopper and just add to the amount of ‘shelf warmers’ on your shelves, shoppers like to have some choice but there’s no need to stock every variant of a brand, each category is different, some will need a large range like health & beauty but some don’t like toilet paper. Your own Epos will give you insights into who your typical shopper is and this will help you in the process of deciding which categories need more range and space than others.
Planograms are a very good way to manage your range and if used in conjunction with your Epos data you can usually gain real insights into your shoppers behavior as well as identify the best and worst performing ranges/products. Planograms are a great way to ensure you have the right product in the right place at the right time. There are many different types of planogram software available and you shouldn't have much difficulty finding one to suit your requirements and budget. Retail Shelf Planner is one such software and is available from the attached link. (Sorry too much hard sell there I apologise, but seriously you should check it out)
If you would like to know more about the category management process or are considering updating your planograms or store layout, get in touch we have the tools and experience to help.
Hello! Could you please help me to identify benefits when you implement category management in our company?
I really appreciate your help,
Gerry Byrne says
In response to your comment, the benefits of implementing Category Management in your company can be far reaching, the key purpose of CatMan is to better understand the shopping mission and your customers (or clients) and by doing so will ensure that you continue to drive category growth (by continuing to satisfy your consumers/shoppers needs). Sounds simple but it takes time to properly implement and ensure complete buy-in from the wider team to insure it works! In short when you follow the process it prompts you to ask the right questions to ensure your business strategy is in sync with your individual category strategies with the purpose of satisfying customers needs.
Hope that helps but do feel free to email me directly firstname.lastname@example.org for more information. Best Regards Gerry